#zerve

[rockyhlwong]

係喎，點會少得切蛋糕。 #throwback #happybirthdaydad #myfamily #zerve (at Zerve & Zerve Plus Bar)

[rockyhlwong]

我就無機會見識兩老既世界，但我可以帶兩老見識一下我見識緊既世界。老豆生日快樂！祝您身體健康，開開心心。一家人齊齊整整，平平安安。 #zerve #familyislife #lovemyfam #theyareallieverneed (at Zerve & Zerve Plus Bar)

[kungpowkingshockey]

#zerve @zervehk what a great season with the #zervespartans. Finishing the playoffs with a championship. Next, hockey 5's #hockey5 #megaice #champions

[lawrencehester]

Aggregators and the Tour and Attractions Industry

This is an expanded post from FareHarbor.com

Why you should work with aggregators

For the majority of FareHarbor’s clients, Google is the leading source of traffic outside of direct visitors (Google accounted for 67.4% of US web searches in July 2014). And it’s a cutthroat world on Google. Businesses are not only competing against competitors for space on the front page of Google search results, but they are competing against TripAdvisor, Yelp, other review sites, and aggregators (online travel agents) too. In later posts, we will examine how to best use review websites and why you should actively monitor and solicit reviews.

With margins thin in the tour, activity, and attractions space, many companies are hesitant to list with online aggregators. Aggregators are defined as an “Internet company that collects information about competing products and services and distributes it through a single Web site” by theThe Oxford Pocket Dictionary of Current English. In travel, this could mean anything from a company that lists all tours in an area, like Hawaii Activities listing Hawaii tours or Scubaba listing all scuba companies. For those unfamiliar with online aggregation, it usually works like this: You list your tour with an online aggregator. Listing is usually free (although some do charge upfront setup and listing fees). For every booking generated via the online aggregator, a commission is paid. This rate most often ranges from 15% to 30%.

Most tour companies believe that anything higher than the standard 20% travel agent referral fee is too high a price to pay for incremental revenue. In many cases they would be right. Aside from pricing, companies worry that aggregators will steal business by organically listing higher for keywords, or aggressively bidding on cost-per-click marketing tools, like Google Adwords. But what about the billboard affect? Let’s look to the hotel industry that has many more aggregators and much more data! According to a WIHP study, “over 20% of direct bookings occurred after the guest found the hotel on an OTA. Which shows us, being on an OTA can also increase your direct bookings.” And according to a Google Study, “52% of travelers visit your hotel’s website after seeing you on an OTA.” (read more here: http://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html

What should you do?

So what does all of this data say? Make sure to work with aggregators that want to be your partner–the best in class are more concerned with selling your company than your activity. Work with aggregators that will provide you with additional direct bookings! Do not work with aggregators that effectively white label your product. As an example, when searching for parasailing in Waikiki, you will find two types of aggregators. 1. Those that compete on price and ease of booking. These aggregators tell you exactly who you are making a reservation with. 2. Those that tell you that you are purchasing a parasail ride. They don’t tell you who you will be riding with. All they provide is a good review (is it even real?). They compete on price too–you just won’t have the opportunity to price shop given that you don’t know whose goods you are buying.

You built your product on your reputation. Don’t let people sell you as a basic tour. And don’t limit the number of aggregators you work with or have a “number.” As long as the price is right and they are marketing your business, you should work with them. On a side note, it is important to remember what was discovered in a recent JD Power survey on hotels and aggregators: “Guests who book through an online travel agency (OTA) tend to be more price sensitive; have lower levels of satisfaction with their stay; are less loyal to hotel brands; and tend to report more problems, compared with guests who book through the hotel website or call the hotel or hotel brand directly.

Setting commission levels

It's important to understand the profit margin of your tour and activity business and to understand your cost of customer acquisition. How many marketing dollars do you spend per customer you service? This number should be examined without aggregators in mind. The goal is to know how much you spend per direct booking. If an aggregator brings you clients at a smaller rate than your current cost of customer acquisition, you are saving money.

Next, at what number of customers and at what price point is your tour operating profitably? This will help determine the base level at which you can allow aggregators to sell your tour. It's best practice to also operate under the presumption that you cannot cancel a tour with an aggregator booking unless absolutely necessary. Aggregators will not resell your business if you have a history of cancellations because of empty tours--this is the cost of doing business.

With those numbers in mind, and knowing that the industry commission rate is between 15% and 30% with an average of 20%, you should be able to offer a starting commission level to your aggregators. And within a few months, you will have enough data to move certain aggregators up or down the spectrum. Is an aggregator not reselling your tour because your commission level is too low and they are sending bookings to a competitor? As long as your commission level allows you to continue to operate profitably, you should move the commission rate up to test the results. And what if the aggregator is selling too much? Don't rock the boat. If you are maintaining acceptable profit margins, you might want to see what other tours your can resell with this partnership.

Don’t let aggregators control your backend

Most online aggregators do not have access to live availability. Without access to live inventory, aggregators are forced to use older methods of confirming bookings made via their website–phone or email. While this might lead some “live and confirmed” bookings to not actually be available, the distinction doesn’t phase the aggregator. They are able to handle the mishaps and are usually able to book their customers on a similar tour or activity. Do most wish they had access to live availability or that their customers could make “real” live bookings via their website? Of course! In both situations, tour and activity customers would have a much better experience. This was very apparent when answering phone calls for North Shore Catamaran–most unhappy customers were given incorrect or outdated information via an aggregator. (To learn more about how FareHarbor is working on solutions to make aggregators and tour operators work better together, visit fareharbor.com/join).

Over the last year, two aggregators have made concerted efforts to monopolize the live availability of their clients. They’ve offered to promote businesses that sign on and have promised droves of bookings if they are the only aggregator allowed to resell an operator or tour. Both are bad options.

Why should you not allow an aggregator to control your backend? Your reservation system should only be focused on your tour and activity company’s success. It shouldn’t be concerned with which aggregators are providing you business or what you are paying your aggregators. Unlike investment banks, aggregation companies do not have Chinese Walls. This means that the team that controls the aggregator’s SEO or Adwords account might use your company’s reports to improve their efforts (and don’t forget, if the booking originates on the aggregator’s website, you owe commission). And most important, your most valuable aggregation partners might be scared knowing that one of their competitors now has access to their financial information. This could lead to dropped accounts, business, or even worse, a lawsuit.

And why is it a bad idea to enter into an exclusive relationship with an aggregator? First off, by limiting the number of resellers, a business is limiting its marketing scope, and effectively its direct bookings. Secondly, these preferred partnerships usually come with a higher commission, not lower. A higher commission is not acceptable in a circumstance where an aggregator is demanding exclusivity. In an exclusive relationship (which is sure to lead to less bookings), the commission amount should be lower. Finally, here in Hawaii, many tour companies have “preferred” relationships with aggregators. Unlike with “exclusive” reselling rights, the aggregator promotes the tour and activity company while still allowing the tour company to work with others.  This rewards both parties for the relationship.

It’s very important to have a hand on how much business aggregators provide and their commission levels (this is easily attainable using FareHarbor’s reports). The next time an aggregator proposes an “exclusive” relationship, counteroffer a “preferred” relationship with a higher commission. And keep an eye on bookings. If the additional commission doesn’t generate enough new business, ask your partner if the commission isn’t high enough, or bring it back in line with your other partners.

If you are in the tour and activity business, I’d recommend you check out FareHarbor. We’re interested in your long term success and in helping you manage and maintain your reseller relationships profitably. You can learn more at fareharbor.com/join.

Additional resources and articles

http://www.wihphotels.com/publication/finding-the-balance-between-otas-and-direct-bookings/

http://www.wihphotels.com/publication/where-do-direct-bookings-come-from-2/

http://www.thinkwithgoogle.com/tools/customer-journey-to-online-purchase.html

http://www.thinkwithgoogle.com/research-studies/2013-traveler.html

http://www.eyefortravel.com/distribution-strategies/digital-strategy-should-google-come-first

http://web.iceportal.com/its-time-to-stop-fighting-against-otas/

http://blog.euromonitor.com/2014/01/the-rise-of-mobile-travel-agencies.html

http://www.hoteliermagazine.com/hotelier-magazine/featured-articles/69-featured-articles/714-a-necessary-evil.html

http://www.hotelnewsnow.com/Dashboard/2/Development

http://www.tnooz.com/article/online-travel-agencies-not-evil-iceportal/

http://www.tnooz.com/article/online-travel-three-approaches-ecosystem/

http://www.tnooz.com/article/google-open-letter-search-wilderness/

http://www.tnooz.com/article/aggregation-vs-curation-do-travelers-really-know-or-care/

http://www.tnooz.com/article/online-travel-agencies-bad-business/

http://www.mckinsey.com/insights/travel_transportation/the_trouble_with_travel_distribution

[findvegan-blog]

Pizza Tour NYC!!!